"That makes sense to everyone...until you're dead."
The most talked about presentation at the Borrell Local Mobile Advertising conference last week was clearly from Clark Gilbert, President and CEO of Deseret Media based in Salt Lake City.
A respected Harvard scholar turned media executive, Gilbert casually predicted that only one in ten traditional local media companies will survive.
This isn't the first time Gilbert has addressed cold hard truth at a media convention. But it may be the first time that everyone in the room was listening. Part of the reason is that audience is shifting from computers into mobile devices in a tidal wave and no one wants to be caught playing catch up for ten more years. Or worse.
Part of it is that Gilbert, since he is now running a media company, he too has had to make major lay-offs and worry about staffing issues. In short, he now has skin in the game.
While some publishers think they are "safe" in small markets, most executives at the conference are looking towards early adapters for answers. Clearly, mobile is behaving like a classic disruptive innovation in its early stages.
To capture the moment, it helps to review what the Innovator's Dilemma was about; the book is a series of studies on train-wrecked industries - from mainframe computers to chemical-based photography. Disruptive innovators start out going after new, usually lower margin or early adapting customers that traditional companies don't have. Overtime, the new companies expand market share, until they simply evaporate the legacy customer base in a few, quiet gulps.
It shows how companies eventually killed off by the disruptive business model were not bad companies but outstanding companies, run by top people, in fact, the best in their fields.
So why do great leaders "miss it" completely?
One insight that Christensen eventually caught on to is that the problem is not really the technology, although technological change underspins the competing business model. The real culprit is the competing business model itself. Therefore, simply adding technology to the current business model will not work.
"Traditional media overwhelms the new initiatives," Gilbert points out. "That always makes sense to everybody...until you're dead."
Something about the mangled syntax perfectly undescores the point. Decisions by great leaders that seem utterly reasonable today leave companies - in a matter of months or years - stuck in a business model that is suddenly no longer relevant. A very personal, and often heart breaking experience, follows; one that leaves former employees, from titons of industry to aspiring journalists, trolling the unfamiliar landscape like burned spies.
Gilbert considers mobile to be disruptive to the PC market. Smart phones, now between 17% to 30% of the market, depending on who was speaking at the convention, will soon compose a majority of phones. Verizon already sells one for $50. Mobile internet usage will top that on PC's by 2012. Even so, not too many local media companies seem to be able to sell a mobile campaign right now, much less adapt to new mobile products such as a full suite of deals.
One executive pointed out that most media companies don't have the same resources as the LDS church. Gilbert has heard this before.
"The question is how can you not do this? Or do you just want to ride this until its over? The question is if you are going to invest (in new business models) or are you going to sell?"
Asked if he was optimistic about the industry, he answered, no.
"Am I optimistic that there is a path? Yes, absolutely. But this not for the weak. Only nine percent will make it through. Ninety percent will follow the same path they are on."
“There is a way forward. It takes dramatic innovation and a complete commitment to change who you are.“
The full case study on Deseret media's digital strategy is here. If you would like to be on the email list for upcoming mobile case studies on companies and campaigns, please send me an email to localmediainsider@gmail.com or join this site for automatic updates.
